Warranty Woes

As GM scaled back operations to focus on its core brands of Buick, Cadillac, Chevrolet and GMC, a last-minute deal with the CEO of Penske Corp. and auto-racing legend Roger Penske was poised to save Saturn from getting the ax, as had Pontiac not long before. But when the deal fell through, the Saturn brand — around since 1985 — fell flat; GM dealers have about a four-month supply of vehicles left, and dealers have a year to shut down, rebrand or at least remove the Saturn signage. Mike Allen over at Popular Mechanics asks: What, then, for current Saturn owners? How will vehicles still under warranty be serviced, and what does GM plan to offer owners once the retailers are no more?

The answer really isn’t clear, and that lack of clarity should be troubling for current owners and a warning flag for those looking to take advantage of the steep discounts that will be offered to move existing inventory off the lots. While GM CEO Fritz Henderson has made the same promise to Saturn owners that he made to Pontiac drivers — that they can take their vehicles to any GM dealership for repair — GM spokesman for service and parts operation John McDonald has been quoted as saying, “Right now, the only warranty repair option for Saturn owners whose local retailer has closed or is going to close is to take their car to another Saturn retailer.” Yes, even if “closest” means 100 miles away.

The current plan is to retool and retrain other GM dealers to handle Saturn repairs, as well as supply them with the right parts — a necessary step, as 70 percent of Saturn parts are unique. As Allen notes, however, that the plan is not as simple as it sounds. Warranty work and parts are a losing proposition for dealers — they’re far less profitable than retail parts and regular maintenance work — and GM can exert little to no leverage to force dealers to sign on, thanks to existing franchise agreements. (Not to mention that franchise laws are different in every state, making a straightforward legal recourse for GM all but impossible.)

Existing Saturn owners may be stuck with a convoluted process to get necessary fixes; those looking to save some coin on a new Saturn at bargain-basement prices should consider that the cash they save upfront may be gone many times over in the course of the vehicle’s lifetime, thanks to this mess. Here’s hoping GM comes up with a solution.